Rejection letter clarifies no variable costs will be allowed
JEFFERSON CITY, Mo. — A bid protest challenging the contract award for seed-to-sale tracking of medical marijuana in Missouri has been rejected by the state. But the rejection also came with a clarification: No variable costs will be allowed with the contract.
An integral part of Metrc’s tracking system, the winning bid, is radio frequency identification (RFID) tags. The cost of the RFID tags — between $0.25 and $0.45 per tag — is often shouldered by the user and, if put on to the industry in Missouri, would fall under “variable costs.”
BioTrack, the company that came in second in the request for proposal process, protested the state awarding the contract to Metrc by alleging the consumer paying the cost of the tags would be unlawful. The protest pointed out the company did not list a price charged to users in the bid, and in Washington, it withdrew from a contract after being unable to charge a per-tag fee.
But the bid protest was rejected by the state on Monday, in part because the winning bidder listed $0 for variable costs. The letter also went on to state the RFP required all prices to be charged, including all prices to be charged for the provision of any services or goods required, be listed.
“The proposal accepted by the Division did not include variable prices in its Exhibit A. That proposal, therefore, did not propose to authorize Metrc to charge variable prices — to licensees or to the State — for the vendor’s contractual obligations. And the resulting contract between Metrc and the State does not authorize Metrc to do so,” stated the bid rejection letter.
Metrc did not respond to requests for comment.
“We consider the results of the protest to be a win for the entire industry. The significant costs that can be associated with RFID tags in many existing state cannabis programs are highly burdensome to businesses and in turn, create higher product costs that are passed onto the patients/consumers. We are pleased that the results of the protest reaffirm that additional variable costs to the licensees or the State will not be allowed,” BioTrack said in a statement.
“The Missouri Department of Health and Senior Services and the Parson administration continue a sharp track record of acting in the best interest of Missouri patients and industry,” Jack Cardetti, MoCannTrade spokesman, said. “Today, the state announced that Missouri’s seed-to sale-tracking contract does not allow hidden costs to be passed along to medical marijuana license holders. This latest development demonstrates Missouri’s program is being run effectively and this decision ensures that patients and facilities will be protected from any hidden fees, which have driven up costs to patients in other states.”